New pensions crisis on way as millions of women may be forced to work longer

MILLIONS more women will be forced back to work because their pensions will not be enough to live on, says a damning new report.

Working is necessary for many women over 50 as pensions are feared to not be enough to live on [GETTY]

Poverty is driving huge numbers of middle-aged women to find work and pushing female employment to record levels.

Many are finding that private and State pensions are failing to provide a comfortable retirement. TUC ­figures show that a staggering 2.27 million more women are working than in 1992 and three out of four of them – 1.64 million – are aged 50 or over.

Critics of the Government’s pensions policy believe the mass return to employment is not just due to a rise in the cost of living. They say the increase in the State pension age and the fall in value of workplace pensions is making work a necessity for vast numbers of older women.

TUC general secretary Frances O’Grady said many older women wanted to work and were taking advantage of changing attitudes and opportunities that have opened up in their lifetime.

The living standards crisis, the increase in the State pension age and the decline in workplace pensions all put pressure on older women

Frances O’Grady, TUC general secretary

But she warned: “Others are working because they cannot afford not to. The living standards crisis, the increase in the State pension age and the decline in workplace pensions all put pressure on older women. Many will be the sole earner in the household.”

The Government is raising the State pension age for women to 65 by 2018 and 66 by 2020.

Pensions expert Dr Ros Altmann said there was “definitely a pensions factor” in the return to work by over-50s women.

“Women have always been – and still are – the poor relation in terms of pensions,” she said.

“Women’s working lives are ­getting longer. One factor is that the State pension age is rising so women will work longer.

“But already the average age of retirement for women is beyond the State pension age, which partly indicates that they do not have enough to live on.

“Another major factor is that women have so much less from their pensions, both from the State and the private sectors, because they were earnings-linked when women may have had breaks in their working lives.

“So women now continue to work because they simply haven’t got enough to live on. There are also an increasing number of women who are single when they reach the State pension age because of a rise in divorce rates.”

But Dr Altmann said the previous unfairness of the State pension being directly linked to earnings was already changing.

“From 2016, everybody will have the same opportunities with a flat-rate State pension,” she said.

However, women in their 50s and 60s now were facing a particularly raw deal, with the TUC saying they are penalised for having children.

Mrs O’Grady said: “Women in their 50s are effectively still paying the price for having taken time out of the labour market and having worked part-time.

“Many now find themselves juggling low paid, part-time work with caring responsibilities. Those that no longer have dependent children may be doing regular care for their grandchildren, elderly parents or a sick or disabled partner.”

While some of the rise in female employment is due to greater numbers of over-50s in the population, the rate of employment in this group has markedly risen.

The TUC report found that in 1992, some 50.7 per cent of women aged 50-64 were “economically inactive”, compared with just 36.8 per cent today.

The study raised concerns over lack of training and low earnings. Average pay was just £15,000 a year for women over the age of 50. Women over 60 were paid £11,000.

The gender pay gap in this age group was larger than for any other decade of life, with women’s average full-time hourly earnings some 18.4 per cent lower than those of men.